capitalism

In the days leading up to the IPO (Initial Public Offering) of Facebook stock as it became a publicly traded company, much of the news surrounding the company was made not by founder Mark Zuckerberg, but by Eduardo Saverin, a young man who became very rich after he invested his life savings in that unknown company running out of a Harvard dorm room. Saverin had announced that he was renouncing his U.S. citizenship, preferring to make his ties with Singapore instead.

In the aftermath of his announcement, it was claimed that he was doing so in order to avoid the heavy tax burden placed on his wealth by the United States. Senator Chuck Schumer (D-NY), a man of whom former Senator Bob Dole once said that “the most dangerous place in Washington is between Charles Schumer and a television camera,” wasted no time in turning this into face time with the press to score political points, joining with fellow Democrat, Senator Bob Casey (D-PA) in announcing their intention to submit the “Ex-PATRIOT” Act.

According to Schumer, this law would “re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country.” Like a modern-day Rasputin, this would enact into law the assumption that politicians have supernatural powers of mind-reading, and would presume any person who renounced U.S. citizenship, while having a net worth greater than $2 million, or an average five-year income tax liability of at least $148,000, had done so for the purpose of tax avoidance. The law, eviscerating the Constitution’s presumption of “innocent until proven guilty” principle, would require the individual to prove to the IRS that they’d not done so for tax avoidance purposes, or risk additional capital gains taxes on any future investment gains.

Yesterday, we went over the top 10 news stories from 2011, which were mainly about news and issues that made headlines this past year. This morning, we’re recapping our most read stories from 2011.

Being a libertarian-leaning blog, we touch on a variety of issues. From those of you that aren’t familiar with libertarianism, it is a philosophy grounded in individual liberty. We believe the individual is sovereign and has a right to pursue whatever lifestyle he chooses, provided that he doesn’t harm or disparage the rights of other sovereigns in the process. The belief in individual sovereign also extends to economic liberty and a belief in free markets.

With that said, our top posts from 2011 range from civil liberties issues, including the National Defense Authorization Act (NDAA) and the Fourth Amendment, to defending free markets and fighting cronyism and corporatism in Washington and on Wall Street to covering Ron Paul’s presidential campaign and having an open discussing the libertarian philosophy.

We offer no additional commentary on these posts. If you would like to read them, just click on the title. Again, have a safe and happy new year.

One of the most disturbing trends I’ve witnessed over these last few years is a coordinated attack from the left on the institutions and principles that make America great. Maybe nowhere has this been more evident than in the vitriol spewed by our eternal Campaigner-in-Chief and his dutiful Minions of Social Justice, all bemoaning the evils of capitalism, and the inequity of wealth distribution (although oddly, their desire for more equal distribution does not extend to income taxes, where the top one percent earn 19% of the income and pay 40% of all income taxes, while the bottom fifty percent that pay exactly zero).

Obama has set so many straw men on fire that he’s now the leading cause of global warming. He accused doctors of slicing out tonsils and amputating limbs just to bill a few more dollars to insurance companies. He’s accused business owners of not caring about their employees and only about their company’s bottom line. He accused the Chamber of Commerce, without proof, of using foreign money to buy elections. His NLRB threatened Boeing for opening a new, billion dollar plant in right-to-work South Carolina, and his wife urged young students not to go into the corporate world, but rather “work for the community” like her community organizer husband, as if bringing valued goods and services and the accompanying jobs and wealth into the community was not a worthwhile endeavor.

When did we reach the point where we extol the timid and the parasitic? Where wealth creation was bad, and the American Dream had been supplanted by a desire for European-style social welfare? We don’t even have to look back in history to see what a nightmare this is; we just have to turn on the news. The Greeks are rioting in the streets at the thought of giving up an ounce of their lavish social welfare benefits, and the European Union is at the brink of collapse as it struggles under the weight of its debt driven by these welfare state policies.

“Now since man is naturally inclined to avoid pain - and since labor is pain in itself - it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.” ~French Economist Frederick Bastiat, 1845, Economic Sophisms”

“There are many well-meaning people today who work at placing an economic floor beneath all of us so that no one shall exist below a certain level or standard of living, and certainly we don’t quarrel with this. But look more closely and you may find that all too often these well-meaning people are building a ceiling above which no one shall be permitted to climb and between the two are pressing us all into conformity, into a mold of standardized mediocrity.” ~President Ronald Reagan

For the past few weeks, America has been treated to a steady news coverage diet of Occupy Wall Street, a motley amalgam of former hippies, idealistic but misinformed college students, Marxist advocates, seekers of mayhem for mayhem’s sake, and the just plain clueless. Welcome to the Flea Party, the far left’s answer to the organic uprising of the TEA Party. However, that is where the comparison stops. Whereas the TEA Party uprising has been peaceful, the Flea Party has been a study in anti-social behavior masquerading as noble civil disobedience.

For the last few weeks, protesters have camped out in New York City to express their grievances with Wall Street. The complaints are somewhat familiar and to some extent, I can understand where they’re coming from. They are upset with what they see as government colluding with corporations for taxpayer-funded bailouts during very tough economics times.

The frustration with corporatism is understandable, libertarians and free market conservatives have expressed the same sentiment for years only to take a back seat to the idea that what’s “good for business” is good policy. But as we’ve come to learn, so-called “pro-business” policies aren’t always a good deal for taxpayers. And by that I mean that we truly want a level playing field, but not through excessive taxation or regulation. Rather, keeping government out of the business of picking winners and losers.

But some members of the nascent “Occupy Wall Street” have expressed demands (note that these demands are unofficial), which for all of their supposed distrust of government, these guys have a very utopian idea of what government should be — likely enough to make Karl Marx and Che Guevara proud. Nevermind that they would be economic suicide.

Among the suggested demands for the movement are (with my comments next to them):

Ayn Rand’s novel Atlas Shrugged regained a great deal of attention recently, what with the economic crisis looming and much of the rhetoric coming out of Washington matching the rhetoric uttered by Rand’s various villains. References to the 1957 novel have made their way onto talk radio, cable television, and Tea Party protests throughout the land. In the book, the great minds of the world go on strike, and even sort of compared to Atlas – who holds the world up on his shoulders – shrugging.

Unfortunately, it’s never going to happen.

In Rand’s book, all the minds share common ideals. They all believe they have a right to make whatever they make. They believed they’re entitled to the wealth they earned from the products of their own mind. They believed that their own self interest was sufficient cause for their actions.

Reality is another matter entirely. For the record, I’m a fan of the book. As I write this, I’m actually wearing a shirt with the first edition’s cover on it. I’ve read the book four times, and as anyone who’s read it can tell you, you do not read it four times unless you like the book. However, I can’t escape the fact that Atlas will never shrug.

The reason for that is that many of the minds, the people who make the things that make this nation run, are no different in their own ideologies from the James Taggarts and Wesley Mouchs of Rand’s imagination. Bill Gates is one of the most successful entrepreneurs of our day, and yet he leans left on most issues…and this is despite being hammered with antitrust violations in the past. Warren Buffett, the Oracle of Omaha, also tends to lean left on most issues.

The free market. Capitalism. Call it what you will. The truth is that people often don’t understand the difference between capitalism and what we currently have. They mistakenly call our current mixed economy capitalism, and they blame companies that try to stamp out competition as being capitalistic. They’re wrong.

Today, many companies spend a great deal of money on lobbyists that take their wish list to Congress. That wish list does occasionally call for relaxing of some regulations, but more often than not it calls of increases in regulation. Why? Because they like the idea of making in harder to enter the market and provide competition. Increase regulations also give them the benefit of possibly stamping out smaller competitors. That forces consumers to go to one of the big guys for their products.

This, my friends, is not capitalism in any way, shape, or form. It’s not. This is corporatism, plain and simple.

In capitalism, these regulations designed to stamp out the little guy wouldn’t exist. Would the little guy thrive? Maybe, maybe not. It would be up to that little guy to make it though. He (or she) would have to work hard, make good decisions, and convince his potential customers that they should be from his company. If all that comes together, then he’ll survive just fine. If not, well…it’s all on him.

Capitalism isn’t a pretty system, but it actually is the most fair. When progressives talk about fairness, they never consider capitalism as being just that. However, it really is. An open market, where each individual is free to determine their own destiny. If they want to start a company, there’s not a governmental body standing in the way trying to keep them from it. There’s nothing to it but their own determination and skill.

On Friday evening, a close friend and I filed to a local theater with about a 100 other movie-goers to catch the first of three installments of Atlas Shrugged on its opening night. We were both excited to see the movie, based on the book that is considered to be Ayn Rand’s magnum opus, but there was also skepticism because every fan of the book knows that this would not be an easy film to make.

There has been talk of trying to bring this very long, very in-depth novel to the Silver Screen for close to 40 years. Albert Ruddy, producer of The Godfather, approached Rand in 1972 about bringing the novel to life. Rand wanted final approval of the script, and because of this, Ruddy declined to proceed. Talk of turning Atlas Shrugged into a movie or miniseries would come and go throughout the several years. As recently as three years ago, it was reported that the movie was in the works, it would have a $70 million budget, and Angelina Jolie would play Dagny Taggart, the book’s heroine. In all too familiar fashion, it fell apart.

Capitalism gets a bad rap these days, as evidenced by Michael Moore’s documentary Capitalism: A Love Story. Like so many people though, Moore – and most of Hollywood – get it wrong. What they decry, greedy individuals exploiting others and using government regulations and rules as a shield isn’t capitalism in the least. That’s called corporatism, as evidenced in the video that Jason posted recently from Reason.tv.

Corporatism is defined as:

Today, corporatism or neo-corporatism is used in reference to tendencies in politics for legislators and administrations to be influenced or dominated by the interests of business enterprises (limited liability corporations).

Basically, corporatism is a system where corporations make the calls on laws. Some would argue that for capitalists, this is a good thing. Unfortunately for those folks, they don’t have a clue what they’re talking about.

We currently see in our government’s actions through things like bailouts for banks and the auto industry (though in all fairness, the auto bailout probably had more to do with politicians being beholden to the United Auto Workers than to GM and Chrysler). That wasn’t capitalism, contrary to what some people argue. Capitalism would have let the banking industry eat their own. Let AIG break up and be bought up by others who are more solvent. Let General Motors break up and be purchased by whoever wanted to own a car company. If no one did, then it’s time for the company to die. It sucks, but it’s the nature of the beast.

****Warning: Spoiler Alert! Part of this post may give away more information than you want to know if you have not yet seen Avatar****

Yesterday, I saw the new blockbuster movie Avatar. Already grossing over $1 billion in ticket sales globally (one of only four movies to do so), the massive investment of around $400 million seems to have paid off. What I want to talk about it the clear political themes that play out in the film, and how conservatives who attack the film are making fools of themselves.

The major concerns that conservatives have brought up about the film is that it attacks capitalism, the military, and pushes the environmental agenda. These claims are unfounded and show the folly in the thought process of such “conservatives.”

First of all this movie does not attack capitalism. In the movie the RDA corporation has set up a mining operation on the planet Pandora. They employ former marines for “protection.” The head of the mining operation has made it clear that he will stop at nothing to gain access to a rich mineral reserve directly under the home of the Na’vi people. They end up sending an all-out military assault which ends in the destruction of the “home tree.” This is hardly an attack on capitalism, if you understand what capitalism truly is.